To understand and evaluate current mergers and acquisition activity for U.S. health systems, Becker's Healthcare leveraged Trilliant Health's SimilarityEngine™ to analyze how similar — or dissimilar — top-performing hospitals of merged health systems are to one another.
The SimilarityEngine™ evaluated the following key metrics for its M&A analysis to develop more tailored cohorts compared to hospital cohort criteria leveraged in the publicly available SimilarityIndex™ | Hospitals.
"While many factors influence the success of a transaction, the similarity of the health systems is a powerful predictor of the likelihood that the systems will successfully integrate," Trilliant Health CEO Hal Andrews said.
Competitive and financial metrics are critical to informed health system M&A decision-making, in addition to understanding market dynamics and service mix. Each M&A scorecard uses Trilliant Health's SimilarityEngine™ to compare hospitals across numerous financial, operational and competitive metrics.
| SimilarityIndex™ | Hospital M&A Cohort Metrics (CUSTOM) |
SimilarityIndex™ | Hospitals Cohort Metrics (PUBLICLY AVAILABLE) |
|
| Intern Residents per Bed | Operating Expenses per Adjusted Discharge | Intern Residents per Bed |
| Bed Size | Occupancy Percent | Bed Size |
| Medicare Case Mix Index | Return on Capital | Medicare Case Mix Index |
| Population Size | Inpatient Market Share | Population Size |
| Age Distribution | Outpatient Market Share | Age Distribution |
| Discretionary Income | Third Party Payer Mix Percent | Discretionary Income |
| Household Debt | Hospital Share of Care | Household Debt |
| Net Patient Services Revenue (NPSR) per Adj Discharge | System Share of Care | Service Mix |
The more similar these hospitals are based on markets, services, financial and competitive metrics, the higher probability that the merged system will continue with the established "playbook" and fully integrate (i.e., the merger will play to systems' strengths). The more dissimilar these hospitals are, the more likely it is that systems will have greater difficulty fully integrating.
Below, find a menu of M&A scorecards detailing combinations' SimilarityIndex™ M&A Score, powered by Trilliant Health SimilarityEngine™ for 12 transactions and deals announced or pursued so far in 2023. For mergers, the similarity of each system's flagship hospital is analyzed. For each hospital listed, scorecards contain the number of other hospitals that are more similar than the one being merged or acquired.